Correlation Between Schneider Electric and Compagnie
Can any of the company-specific risk be diversified away by investing in both Schneider Electric and Compagnie at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Schneider Electric and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schneider Electric SE and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Schneider Electric and Compagnie and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Schneider Electric with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider Electric and Compagnie.
Diversification Opportunities for Schneider Electric and Compagnie
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Schneider and Compagnie is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Schneider Electric SE and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and Schneider Electric is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Schneider Electric SE are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Schneider Electric i.e., Schneider Electric and Compagnie go up and down completely randomly.
Pair Corralation between Schneider Electric and Compagnie
Assuming the 90 days horizon Schneider Electric SE is expected to under-perform the Compagnie. In addition to that, Schneider Electric is 1.1 times more volatile than Compagnie de Saint Gobain. It trades about -0.05 of its total potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.16 per unit of volatility. If you would invest 8,304 in Compagnie de Saint Gobain on August 28, 2024 and sell it today you would earn a total of 444.00 from holding Compagnie de Saint Gobain or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schneider Electric SE vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| Schneider Electric |
| Compagnie de Saint |
Schneider Electric and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schneider Electric and Compagnie
The main advantage of trading using opposite Schneider Electric and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider Electric position performs unexpectedly, Compagnie can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Compagnie will offset losses from the drop in Compagnie's long position.| Schneider Electric vs. Air Liquide SA | Schneider Electric vs. Vinci SA | Schneider Electric vs. LOreal SA | Schneider Electric vs. Compagnie de Saint Gobain |
| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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